OUTLOOK“We continue to generate momentum through our oil and gas strategic initiatives to increase exploration, production and reserves. Drilling activity in East Texas and Louisiana is focused on oil and natural gas liquids principally related to the Austin Chalk and Wilcox formations. Going forward, the acquisition of CREDO Petroleum Corporation is expected to double production and reserves, provide meaningful ownership in strategic oil and gas basins and further enhance transparency and disclosure. This acquisition will create a meaningful oil and gas platform well positioned to maximize shareholder value going forward. “Residential real estate fundamentals in Texas remain favorable, with stable demand and low levels of desirable inventory. As a result, we are beginning to see the benefit of recent acquisitions and investments, including solid residential lot demand at the Barrington Kingwood community near Houston which was acquired in third quarter 2011. Sustaining the housing recovery will require increased economic activity and employment growth. “Multifamily fundamentals in our target markets remain strong with high occupancy rates, meaningful rent growth and absorption exceeding new supply. During second quarter we formed a venture with Canyon-Johnson Urban Funds for development of Eleven, a 257-unit community in downtown Austin. In addition, we formed a venture with Guggenheim Real Estate for the development of 360°, a 304-unit community in the Denver Tech Center sub market. As a result, we received $10.9 million in reimbursed costs from these ventures in return for the contribution of two multifamily sites and a 20-25% retained ownership interest. These ventures support our multifamily strategy to deliver a low-investment, high-return business by leveraging our sites and resources with capital from partners to create and realize value from multifamily. In addition, we are focused on accelerating value realization from our two stabilized multifamily properties in second half of 2012.